I realize some of you think I am a bit on the loony side; however, after watching a short video clip of Mr. Cramer and his performance the other day, I'm an amateur. Shakespeare got it wrong: the world is not a stage, it is a lunatic asylum. You can tell things are imploding in the economic sphere when the shills start shrieking. I would say an Oscar caliber performance at the least. The network anchor in the movie "Network" comes to mind with his "mad as hell and I'm not going to take it anymore" rant. Of course, this is exactly what the powers that be are terrified of.

Much has been made of the American Stock Markets as "economic indicators." What rubbish! Any resemblance between the American Stock Markets and the actual American Economy are pure delusion. For instance, the fiat Federal "dollar" has been collapsing at a steady rate the last five years. It would be logical the stock markets would be declining since the sacrosanct "corporate profits" they worship are actually going down. Nope. Or perhaps the stock markets would judge the Federal Government as actually bankrupt? Nope. The markets just gleefully crash through the 14,000 barrier based upon the delusion of the moment. Well, the delusions are ending. And the hangover is going to be savage. Risk is coming back into the economic sphere.

We are assured all is well since the market "recovered" on Monday. This "recovery" is based upon the belief the Fed will "save" the stock markets at today's, August 7, 2007's, meeting. This is the only rational explanation for the rise Monday, although the Plunge Protection Team sure looked active around 2 p.m. to me. The PPT that doesn't exist of course. The PPT is like dark matter in the universe. You can't actually see it, but you sure can see its effects.

At any rate, the Fed is starting to look like the puddle that used to be the Wicked Witch in the Wizard of Oz. Greenspan may be a rat, but he got out of the Fed at the right time. Now if Greenspan only would just shut up. It looks like to me Braying Bernie, my designated name for the new Fed Chief, will be left holding the noose. You could see this coming once the M3 money supply reporting ceased last year. And then the Fed started faking the inflation numbers by dropping energy and food, both dealing with 25 to 33% increases in the last year, to maintain the fiction of low inflation. The Fed Chief now sounds more like a braying jackass than an economist when he issues his profundities these days. The Treasury Chief is reduced to whining about raising the debt level, as if the nine trillion will ever be paid back. And this is the crew which will save the stock markets? The inmates are certainly running the economic policy of the Fed.

What exactly do the markets expect the Fed to do? The Fed can lower interest rates, they can increase them, or they can leave them alone. The Fed is already increasing the money supply at an hyperinflationary rate, although in an openly secretive way, if you get my drift. I think the difference between the insolent elite is not that they don't care about the rabble, they never did. The difference is the degenerate elite now no longer cares that we know they don't care. Hurricane Katrina showed that. Think on that for a moment. Hold on to your gold and silver kiddies, Weimar is coming.

The Fed is now caught between domestic political and economic realities and international political and economic realities. I'm afraid the stock market is on its own. The stock market investor sentiment, or the toxic vapors and fumes inhaled from the media economic shills, analysts, assorted whores, fools, con men and women, shysters, idiots, criminals, morons and liars on a daily basis, needs to be restored. The fundamentals are sound we are told. Unfortunately, the economic fundamentals are not sound, or else I wouldn't be writing this. If the Fed raises rates, to protect the collapsing dollar, the domestic economy will collapse in a sea of foreclosures, debt and risk based collapsed. You do remember risk? If the Fed, lowers rates, to protect the collapsing domestic economy and squirt more lighter fluid onto the stock market bonfire, the dollar will accelerate both its collapse and replacement as the global reserve currency used to price oil. If the Fed does nothing, the game will go on until some trigger event overwhelms the economic reality.

We will look back, at some future date, at the summer of 2007 as a defining era in the economic sphere. We are witnessing the reemergence of RISK after a long hiatus. Obviously, risk has been the missing factor in pricing of everything really. Whether it is houses, or stocks, or bonds there has been little risk factored into the pricing equation. What happened since the stock market hit the famous 14,000 level is people actually started to question the assumptions. What has passed for economic wisdom these last few years, the endless hype of endlessly rising asset values, houses, stocks etc., has been shown to be the idiocy it is. The idiocy I may remind you dear reader that I have endlessly told you it was. God, it is hard for me to be humble sometimes. The American Stock Market has decided that the housing collapse has legs. They have concluded the fabled second quarter recovery of 2007 is not coming. They have concluded the debt based fantasies used to finance all this sub prime, prime and not quite ready for prime time economics is really dangerous up and down the food chain. As long as only the lower income trash gets thrown out onto the street it was no big deal, but now that the big boys, Bear Stearns for instance, are losing money and bosses, well this is serious. You would think with Bear in its name Bear Stearns would have covered their rear better. I think I am correct. The elite really is the stupid, arrogant and greedy fools I have always said they were. I may have had egg on my face here at www.gold-eagle.com from time to time, but who has that brown stuff all over theirs? HUM?

Braying Bernie and his Fed cannot alter the economic fundamentals of a psychological shift in perceptions. It is beyond them. Now that risk is back in the markets and the economy it is Pandora box time. The reason I know this is true is what happened, or actually didn't happen to Chrysler, and their attempt, their failed attempt, at finance. What if they tried to raise a bond and nobody bought it? What if investors concluded the risk premium wasn't factored into the bond price and they refused to buy it? What will happen to the issuers? The parties involved? The American economy? The global economy? What will happen to the vaunted, fantasy stock market when merger activity implodes? Stay tuned.

When I was a young man, I used to work at an orchard. One of my jobs, was to grease the various types of equipment we used. Back then, late 1960's to early 1970's, factory sealed bearings were a rarity and you used to have to manually lubricate the bearings. I can remember using a paint stirring stick, a five gallon pail of Chevron Grease and filling a "grease gun." I would then stick the end of the grease gun on the nipple and pump away. I think they were called zierks if I remember correctly. The economic jerks of our time, the shills and fools, the politicians and greedy sleaze balls who have conned an entire people, have come full circle. What is now happening is what I said would happen. The fiat funny money system runs on illusion, fantasy, endlessly creation of money, of credit and of debt. Our economic system runs on the belief the reckoning will never happen, or at least not in our lifetimes. But, like the tractors I used to lubricate, the grease must flow, or the wheels will lock up.

What we are starting to witness is the great credit lock up. The reason credit is locking up is people are now factoring in all the risk factors they have ignored. The leaders have repeatedly lied to us about the true nature of our economic situation. The people have allowed themselves to be sucked into a fantasy that now increasingly resembles a jet engine. And we know what happens to the pigeons which end up in the belly of a jet engine. The Powers that be may yet continue the delusion for a while longer. However, they cannot change the fundamental economic reality underlying the stock market declines, or the housing collapse, or the dollar collapse or the rise in precious metals prices. This reality is people now view things differently. Braying Bernie can bray all he wants. The people are beginning not to listen, or care.

10 years ago began the greatest financial crisis of our modern economic age. The collapse of the Asian Tigers in the summer of 1997 eventually led to the collapse of the Russian bond market in 1998. This led to the near collapse of the global economic system. Even Greenspan agrees with me on that one. Now we find ourselves at a similar decisive point. We are at the wrong place at the wrong time. I believe we will date economics from Before Chrysler and After Chrysler in the summer of 2007. The reason for that is we have seen the credit spigot dry up. When risk is factored into the pricing it is all over. All of it!

We are looking at liabilities in the 600 TRILLION range, not billion. We are looking at unwinding 600 TRILLION in unfunded liabilities at all levels of the global economy. Braying Bernie and his Fed can't print enough money to cover it. The entire economic system can't comprehend it, much less deal with it. Once you look at the harsh realities underlying the global and domestic economies you realize we are like the people sitting in their cars on that bridge in Minneapolis. Take care of yourself since you can't expect any help from the system.